The European Central Bank published an analysis finding that government support for large manufacturers is rising globally, with Chinese firms receiving broader and more intensive support than firms in the United States and euro area. Chinese industries receiving more support also tended to export more, particularly in strategic sectors, while the relationship was much weaker in the other two economies. Global support captured by the OECD dataset almost doubled after the global financial crisis to USD 108 billion in 2024. Subsidies equaled about 2% of domestic firms’ costs in China, compared with 1.4% in the United States and 0.6% in the euro area. Preliminary estimates indicate that support had its strongest effect on Chinese firms’ domestic and foreign revenues in the first two to three years, and contributed between four and 14 times more to export growth in the automotive, solar panel, wind turbine and semiconductor sectors than across the overall sample. The analysis concludes that subsidies are unlikely to drive aggregate global imbalances, which primarily reflect national saving and investment patterns, but may reshape trade and create adjustment pressures in strategic industries. It cautions that further research is needed because the findings cover a relatively small sector sample and do not establish a robust causal link between subsidies and exports.
European Central Bank2026-08-14
European Central Bank analysis links Chinese industrial subsidies to stronger exports in strategic sectors
European Central Bank analysis finds that Chinese manufacturers receive broader and more intensive government support than peers in the United States and euro area, with subsidized strategic sectors tending to record stronger exports. Global support in the OECD dataset reached USD 108 billion in 2024. Subsidies may reshape trade in key industries but are unlikely to drive aggregate global imbalances on their own.